Capital gain

A capital gain is a profit that results from a sale of a capital asset, such as stock, bond or real estate, where the sale price exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price.

Taxation of capital gain

Exemptions and opinions on exemptions

Tax relief or exemptions may be available for capital gains in relation to holdings in certain assets such as significant common stock holdings. Reasons for such exemptions are to provide incentives for entrepreneurship, to compensate for the effects of inflation, or to avoid "double taxation".